Correlation Between HUMANA and The9
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By analyzing existing cross correlation between HUMANA INC and The9 Ltd ADR, you can compare the effects of market volatilities on HUMANA and The9 and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in HUMANA with a short position of The9. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and The9.
Diversification Opportunities for HUMANA and The9
Excellent diversification
The 3 months correlation between HUMANA and The9 is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and The9 Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The9 Ltd ADR and HUMANA is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on HUMANA INC are associated (or correlated) with The9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The9 Ltd ADR has no effect on the direction of HUMANA i.e., HUMANA and The9 go up and down completely randomly.
Pair Corralation between HUMANA and The9
Assuming the 90 days trading horizon HUMANA INC is expected to under-perform the The9. But the bond apears to be less risky and, when comparing its historical volatility, HUMANA INC is 7.98 times less risky than The9. The bond trades about -0.09 of its potential returns per unit of risk. The The9 Ltd ADR is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 690.00 in The9 Ltd ADR on September 3, 2024 and sell it today you would earn a total of 785.00 from holding The9 Ltd ADR or generate 113.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.88% |
| Values | Daily Returns |
HUMANA INC vs. The9 Ltd ADR
Performance |
| Timeline |
| HUMANA INC |
| The9 Ltd ADR |
HUMANA and The9 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUMANA and The9
The main advantage of trading using opposite HUMANA and The9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, The9 can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in The9 will offset losses from the drop in The9's long position.| HUMANA vs. JetBlue Airways Corp | HUMANA vs. Air Transport Services | HUMANA vs. Sun Life Financial | HUMANA vs. Bank of America |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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